Determinants of Residential Real Estate Prices in Nairobi

Abstract

Residential properties are properties that serve as housing or a dwelling and encompass single-family, duplexes and other multi-family homes. In Nairobi real estate industry has played a key role in the growth of the economy due to its high multiplier effect through increased investments in production and marketing of building materials, employment generation and wealth creation. In Nairobi real estate market, little has been done to check the set of forces behind the housing prices. As such the study sought to investigate the determinants of residential real estate prices in Nairobi. In this study a quantitative approach was followed. The researcher used data for the main players in the financial sectors which are mainly concerned with the regulation of the real estate industry. The study used secondary data which were largely quantitative and descriptive in nature. Data analysis was carried out by use of simple mean, standard deviations, percentages, regression and correlation analysis by use of Statistical Package for Social Sciences (SPSS) Version 21. The study found that the level of money in supply information can give economists and financial analysts a better understanding of the real estate market and its influence on real estate prices. To the financial analysts, it is important to realize the need to sensitize their clients to do more investment in real estate in municipality areas like Nairobi because there is need for more residential real estates. Further, they need to let financial institutions realize that real estate investment in such metropolitan and municipalities is not exhausted in financing so that they can open up possibilities for their client who would like to venture in the same.